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Listen to Small Businesses’ Red Tape Worries

Government red tape can sometimes reach far beyond what Congress ever intended, and into the realm of the ridiculous.

Last week, the Washington Post provided an example. One small businessman, a magician, has an act that includes a small rabbit. The United States Department of Agriculture (USDA) required him to get a license for his rabbit, pay an annual fee, submit to surprise inspections of his home, and come up with a rabbit disaster plan. That sounds like one thoroughly regulated rabbit, and one colossal bureaucratic overreach. The disaster plan we actually need is how to untangle ever-increasing government red tape. As the Post put it, “The story behind it illustrates the reality of how American laws get made. First Congress passes a bill, laying out the broad strokes. Then bureaucrats write regulations to execute those intentions. And then, often, they keep on writing them. And writing them.”

The rabbit disaster plan is the outgrowth of bureaucrats regulating under a 1965 law for nearly 50 years. So here’s a related rabbit trail to consider. What will the massive health care law’s regulatory nightmare look like after 50 years of bureaucratic meddling? That should give us all pause. We can only hope it gets repealed long before our country finds out. Of course, if Washington had listened to the American people, the health care law would never have been passed.

Washington could save a lot of trouble by listening to the American people, particularly regarding small businesses. I’ve never yet heard a small business owner suggest anything that would lead to a rabbit disaster plan. That’s more the thinking of Washington bureaucrats. Following the embarrassment of a major newspaper’s story, the USDA is reviewing that specific regulation. But there are many more regulations on the books that should be thoroughly reviewed.

Small businesses need regulatory relief, and they say so at every opportunity. Over the last four years, the regulatory burden has mounted up. Major rules alone have added nearly $70 billion in new regulatory costs. In Fiscal Year 2012, more than 3,800 new final rules were issued.

In the latest U.S. Chamber of Commerce second quarterly survey of more than 1,300 small business owners, released last week, their top three concerns were the requirements of the health care law, closely followed by regulations and economic uncertainty. “Regulatory concerns contribute to the uncertainty that small business owners face when planning for the future,” notes the executive summary.

Asked what they would like to see from Washington, 85 percent wanted Washington to get out of the way, while 63 percent are worried about what will come next from Washington. That’s not surprising, because what comes next from Washington is almost always another regulation – often without adequately listening beforehand.

Small businesses are disproportionately burdened by regulatory costs, paying a cost that is 36 percent higher on average than larger counterparts, according to a 2010 Small Business Administration study.

This week, the House Small Business Committee will welcome Office of Information and Regulatory Affairs (OIRA) Administrator Howard Shelanski to testify on the administration’s regulatory review process. OIRA is charged with the critical role of reviewing significant regulations and overseeing agencies’ review of existing regulations.

That’s a tough job in a constantly expanding regulatory state. But it is a necessary job that I hope this administration is taking seriously, and not just using for feel-good press releases.

I want to be clear. Not all regulations are bad, but many can be unnecessarily burdensome and it is important that small companies express their concerns before a rule is finalized. That’s why I launched “Small Biz Reg Watch,” an initiative of the committee to help small businesses participate in the development of federal regulations. This resource on the committee’s website highlights proposed regulations that could impact small companies and instructs business owners on how they can make comments to the federal agency considering the proposed regulation.

Just as small businesses need regulatory relief, the economy needs those small businesses to grow and hire. Yet the regulations just keep piling up. There are other factors hindering the economic growth and job creation we need, but the regulatory burden is one of the biggest factors – and it is a dynamic that could be altered.

I’m glad that the president is pivoting yet again this week and talking about his plan to revive the economy. But small businesses have been telling us what they need to grow and hire. Is the administration listening?